Slide 1: Ormat Technologies, Inc. Investor Presentation May 2024
ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION MAY 2024
Slide 2: Safe Harbor Statement and Non-GAAP Metrics
SAFE HARBOR STATEMENT AND NON-GAAP METRICS THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS, AND THE DISCLAIMER SHOULD BE READ CAREFULLY FORWARD-LOOKING STATEMENTS These forward-looking statements are not intended to be a guarantee of future results, but instead This presentation, and informati
Slide 3: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 3 3
Slide 4: A Leading Renewable Energy Provider
A LEADING RENEWABLE CD4, Mammoth Complex, NV, USA, 65MW ENERGY PROVIDER WITH A PROVEN TRACK RECORD IN GEOTHERMAL AND ENERGY STORAGE Over Own & Operate 55 1.4GW ~ 1,600 Years of Geothermal, Storage, Employees experience Solar PV & REG1 $ 829M $ 482M $ 124M 2023 revenues 2023 adj. EBITDA2 2023 Net inc
Slide 5: Our Business Segments
OUR BUSINESS SEGMENTS 80% 16% 4% Of 2023 Of 2023 Of 2023 Revenues Revenues Revenues ELECTRICITY PRODUCT ENERGY STORAGE Develop, build, own and operate Design, manufacture and sell Growing to establish geothermal, solar and recovered equipment for geothermal and leading position in the energy-based (
Slide 6: Q1 2024 Project Development Highlights
Q1 2024 PROJECT DEVELOPMENT HIGHLIGHTS 130MW 193MW 335MW/1,040MWh 335M New capacity added in Electricity under Energy storage Capital raised2 Q1 2024 construction & under construction & development development Electricity – 10MW Geothermal – 131MW Texas – 120MW/240MWh $200M corporate debt organic an
Slide 7: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Access to multiple sources of liquid capital 4.1x Net debt to Adj. EBITDA2 $472M $765.5M Expected CapEx Total for Q2-Q4 20241 liquidity3 45% Net debt to Raised $30M project finance loan capitalization2 after Q1'24 quarter end (1) Fo
Slide 8: Overview, U.S. Geothermal Market, New Zealand & Indonesia, Growth Targets
Overview U.S. Geothermal Market New Zealand & Indonesia Growth Targets COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 8 8
Slide 9: Overview
OVERVIEW Generates firm & flexible power Diversified portfolio 2022 revenue geographic breakdown 1 945MW U.S. 3 33MW Honduras 5 150MW Kenya 1,225MW 77% U.S. 23% International Geothermal, 2 40MW 4 15MW 6 42MW1 Solar PV & REG Guatemala Guadeloupe Indonesia 92% Growing Profitable portfolio3 Geothermal
Slide 10: Geothermal Market
GEOTHERMAL MARKET 2nd Largest geothermal ABOITIZ POWER owner & operator1 STAR ENERGY PERTAMINA ON POWER MERCURY ORMAT CALPINE KENGEN ENEL EDC CFE ~ 16.3GW Ring of fire Global installed geothermal capacity1 10x Global potential EU Africa ASIA Oceania U.S LATAM vs. installed 1 Installed 3.6 0.9 4.9 1.
Slide 11: Regulatory Environment: Financial Impact of IRA
REGULATORY FINANCIAL IMPACT OF IRA ENVIRONMENT Income attributable to sale of tax benefits1 Q1 2024 2024 outlook Income tax line - $38 million 17.5 benefit that will be recorded to 12.6 4.4 income before tax throughout 1.8 the year. 13.1 10.8 $11.5 million was recorded in Q1 2024 Q1 2023 Q1 2024 Tra
Slide 12: Development in Indonesia
DEVELOPMENT IN INDONESIA SARULLA 42MW TOKA TINDUNG Under development: # 1 4 th in operation initial drilling Largest Largest 12.75% 75-100% economy in country in ownership ownership Southeast Asia1 the world 2 BBB/ Baa2 ~ 33GW Country’s 2020 electricity rating by S&P production4 and Moodys3 WAPSALIT
Slide 13: Significant Milestone: Development in NZ
The Wairakei geothermal power plant SIGNIFICANT MILESTONE: 50MW DEVELOPMENT IN NZ # 5 > 3.6GW Worldwide in Geothermal total installed resource Ormat to design, build and own 50MW power plant geothermal capacity potential Expected COD: Q4 2025 > 1GW ~ 18% Installed geothermal Of total electricity cap
Slide 14: Electricity Segment - Summary
ELECTRICITY SEGMENT - SUMMARY GROWTH DRIVERS: & NEW ZEALAND TARGETED GROWTH (MW): 1,450-,1,470 1,215 1,012 1,070 914 +11% +6% +14% +19% - 21% 2019 2021 2022 Current 2026E Geothermal Solar PV COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 14 Note: Please see appendix for detailed list of projects includin
Slide 15: Storage Market, Regulation, Pipeline Update
Storage market Regulation Pipeline update COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 15 15
Slide 16: U.S. Energy Storage Market: Steep Growth Trajectory
Andover storage facility, NJ, USA 20MW/20MWh U.S. ENERGY STORAGE MARKET: STEEP GROWTH TRAJECTORY U.S. FTM cumulative storage deployment forecast (GW) 58 GW 26x 2.2 53% California GW & Texas 2020 2021 2022 2023E 2024E 2025E 2026E California Texas Nevada Arizona Hawaii New York PJM (& NJ) All Others S
Slide 17: Energy Storage
ENERGY STORAGE TARGET THE LARGEST AND MOST LUCRATIVE MARKETS: 4 California, Texas, and PJM 1 2 3 FOCUS ON STANDALONE ENERGY STORAGE Providing ancillary service, energy and capacity to the grid EXPANSION TO NEW REGIONS Short-term: additional markets in the U.S. Mid-term: international regions 1 55MW/
Slide 18: Key Factors Driving Ormat's Accelerated Energy Storage Development
KEY FACTORS DRIVING ORMAT’S ACCELERATED ENERGY STORAGE DEVELOPMENT 43% DECREASE IN LITHIUM PRICES YTD1 YTD Lithium Carbonate Price (CNY/T) 400,000 300,000 196,599 200,000 100,000 IRA Batteries Increased demand Strong pipeline 111,209 tax benefits price reduction for RA and tolling in CA with secured
Slide 19: Ormat's Storage Pipeline
ORMAT’S STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh 335MW/ 1,040MWh 6 under development projects ~3.8GW / 14.2GWh 36 potential capacity prospects of total pipeline Others 150 U.S. storage Texas 425 pipeline GEOGRAPHIC WECC 505 1 BREAKDOWN East Coast 595 IN GW California 2,125 1
Slide 20: Ormat Energy Storage Development
ORMAT ENERGY STORAGE DEVELOPMENT Energy storage by MW Energy storage by MWh 700-800 1,900-2,300 50% - 52% 335 70% - 75% 2019-2026E 2019-2026E CAGR CAGR 170 190 20 298 318 73 83 88 82 196 20 1,040 43 10 5 190 136 176 20 102 170 40 30 83 88 46 90 298 318 42 43 73 45 136 176 196 1 1 46 2019 2020 2021 2
Slide 21: Segment Overview, Backlog Updates
Segment overview Backlog updates COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 21 21
Slide 22: Product Segment Overview
PRODUCT SEGMENT Primary provider of geothermal binary plants Suppliers of geothermal power plants 2018 – 2023 capacity (MW) OVERVIEW 61% 74% Binary Ormat A market leader 1,934 BINARY MW TOTAL Built approximately 190 power plants and installed approx. 3,200 MW of geothermal Kaishan 13% & REG over the
Slide 23: Focusing on Strategic Territories
FOCUSING ON STRATEGIC TERRITORIES(MW) 1,285 MW IN 3 years Eexpected release of geothermal binary capacity U.S. TURKEY 193MW 202MW INDONESIA 365MW LATAM 160MW NEW ZEALAND 365MW Source: Thinkgeoenergy.com and Ormat analysis COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 23
Slide 24: Product Backlog
PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTY CONTRACTS ~$ 130M 94% Backlog Geothermal contracts Backlog Recovery($M) Geographic Breakdown 6% 2% 4% 3% 130 3% 97 1% 81% Q1/20 Q1/21 Q1/22 Q1/23 Q1/24 New Zealand Guatemala Indonesia 2 Turkey USA Other 1) Backlog as of MAY 8, 2024. The backlog Includes revenu
Slide 25: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 25 2
Slide 26: Robust Growth Plan
ROBUST GROWTH PLAN 2.1GW - 2.3GW 92% - 103% 2026 portfolio target Expected MW growth vs driven by successful 2023 expansion efforts Significantly Accelerate increase solar storage capacity & geothermal to establish leading position in the U.S. capacity storage sector This growth plan is subject to o
Slide 27: 2026 Growth Target by Segments
2026 GROWTH TARGET CD4 part of Mammoth complex, CA, USA 65MW BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE YE 2026 TARGET 1,450MW-1,470MW 700MW-800MW/ 1.9 GWh-2.3 GWh MW ADDITION (VS END OF 2023) 335W-355MW 530MW-630MW MW GROWTH 30%-32% 312%-370% Change in MW growth is compared to a 1,115MW G
Slide 28: Geothermal Development
GEOTHERMAL DEVELOPMENT North Valley, NV, USA 25MW Projected Expected Project PPA Capacity (MW) COD U.S – Beowawe Repowering 6 Q3 2024 ✓ Guatemala – Zunil 5 Q4 2024 ✓ Under development: Indonesia – Ijen 15(1) Q4 2024 ✓ 131MW Guadeloupe- Bouillante 10 Q4 2025 ✓ from Dominica - Dominica 10 Q4 2025 ✓ 11
Slide 29: Solar Development
SOLAR DEVELOPMENT Projected Expected Project PPA Capacity (MW) COD U.S. – Steamboat Hills Solar 4 ✓ Under development: U.S. – North Valley Solar 6 ✓ 62MW U.S. – Beowawe Solar* 6 Q4 2024 ✓ from 3 projects U.S. – Arrowleaf 42 H1 2025 ✓ U.S. – McGinness Hills Solar 14 H2 2026 ✓ Commercial operation was
Slide 30: Energy Storage Development
ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh Projected Projected Expected Project Capacity ITC %1,2 PPA MWh COD (MW) NJ – East Flemington 20 20 30% Merchant Under development: CA – Bottleneck 80 320 40% Q2 2024 Full Tolling 335 MW/ NJ – Montague 20 20 30% Q1 2025 Merchant
Slide 31: 2024 Guidance ($M)
2024 GUIDANCE ($M) (1) Total revenues Electricity Products Storage Adjusted EBITDA 860-910 710-730 115-135 35-45 515-545 +7% +8% -7% +38% +10% 2.1GW - 2.3GW TRANSITIONING TO ACCELERATED +19%-21% GROWTH 1.3GW CAGR 2023-2026E IN STORAGE & ELECTRICITY 1.1GW 1.16GW SEGMENTS Storage Solar Geothermal 2021
Slide 32: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 32 3
Slide 33: Strong Financial Positioning
STRONG FINANCIAL POSITIONING Installed Capacity Growth (MW) Revenue Growth ($M) 1,385 1,415 1,158 1,095 957 1,005 $829 $868 $746 $705 $734 $663 2019 2020 2021 2022 2023 March 31, 2019 2020 2021 2022 2023 LTM Geothermal REG Solar Storage 2024 Electricity Product total Adjusted EBITDA1 Growth ($M) $48
Slide 34: Strong Financial Positioning
STRONG FINANCIAL POSITIONING Total Debt ($M) Net Debt ($M)1 $2,359 $2,062 $2,027 $2,089 $1,908 $1,800 $1,801 $1,521 $1,456 $1,238 $1,085 $919 2019 2020 2021 2022 2023 March 31, 2019 2020 2021 2022 2023 March 31, 2024 2024 Project Finance Finance liability Corporate Debt Net Debt to Capitalization (T
Slide 35: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 35
Slide 36: Environment Highlights
HIGHLIGHTS 2.2 M tCO2e AVOIDED emissions compared to ENVIRONMENT the local grid, only in 2022 19% Absolute reduction in Scope 1 and 2 GHG emissions compared with 2019 baseline 25% Reduction in GHG emissions intensity (tCO2e/MWh) compared with 2019 baseline 30% Women in VP-level 25.3 Training hours p
Slide 37: Governance Highlights
HIGHLIGHTS COMMITMENT TO UPHOLDING GOVERNANCE THE HIGHEST STANDARDS ACROSS THE ORGANIZATION Our corporate governance practice is defined by honesty, openness and fairness We are constantly improving our governance and our level of disclosure on related topics, such as anti- corruption, executive rem
Slide 38: Attractive Investment Thesis
ATTRACTIVE INVESTMENT THESIS Strong financial positioning Robust growth potential ESG Strong balance sheet and favorable Significant, consistent Renewable asset growth leverage profile domestic growth in the U.S. supported by favorable regulation Long-term contracted International geothermal growth
Slide 39: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 39
Slide 40: Air-Cooled Binary Geothermal Power Plant
AIR-COOLED BINARY GEOTHERMAL POWER PLANT COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 40
Slide 41: Payment of Principal Due by Period ($M)
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.57% ($ millions) Q2-2024 Q3-2024 Q4-2024 Year 2024 Long-Term non-recourse & limited recourse debt 13.3 13.6 19.1 46.0 Long Term Loans Full Recourse 50.9 38.1 23.8 112.8 Finance Liability - 2.7 - 2.7 Total $64.2 $54.4 $42.9 $161.5 Remai
Slide 42: CapEx for 2024
CAPEX FOR 2024 ACTUAL INVESTED TOTAL CAPEX TOTAL CAPEX ($M) IN Q1 2024 FOR Q2-Q4 2024 FOR 2024 Electricity Segment 84 254 338 Construction & Enhancements – fully released 37 148 184 Development enhancement, drillings and Exploration 31 57 88 Maintenance CapEx 16 50 66 Storage Segment 13 196 209 Prod
Slide 43: Finance Highlights
FINANCE HIGHLIGHTS Q1 2024 Q1 2023 Change (%) GAAP MEASURES Revenues ($M) Electricity 191.3 170.3 12.3 % Product 24.8 10.0 147.3 % Energy Storage 8.1 4.9 65.6 % Total Revenues 224.2 185.2 21.0 % Gross Profit ($ millions) 78.8 76.1 3.6 % Gross margin (%) Electricity 39.0% 44.4 % -540 bps Product 14.8
Slide 44: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Ended March 31, 2024 2023 Net income 40,350 33,461 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 29,129 21,780 Income tax provision (benefit) (147) 8,885 Adjustment to investme
Slide 45: Reconciliation of Adjusted Net Income and Adjusted EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND ADJUSTED EPS Three Months Ended March 31, 2024 2023 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders 38.6 29.0 M&A costs 1.0 - Adjusted Net income attributable to the Company'
Slide 46: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES March 31, 2024 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 202 Restricted cash and cash equivalents 97 Total cash and cash equivalents, marketable securities and Restricted cash (in milli
Slide 47: Geothermal Development
GEOTHERMAL DEVELOPMENT Ormat's geologists during exploration activity Region Location # of sites Nevada 22 42 California 4 prospects U.S. Oregon 2 Utah 4 New Mexico 1 Guatemala 2 CENTRAL AMERICA Honduras 1 AFRICA Ethiopia 4 ASIA PACIFIC Indonesia 2 COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 47